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INTRODUCTION

SAARC is an economic
and political
organization.
SAARC was established
on December 8, 1985.
In terms of population almost 1.5 billion
people.

It aims to accelerate the


process of economic
and social development
in Member States.
SAARC provides a
platform for the peoples
of South Asia to work
together in the spirit
understanding.
In April 2007, at the
Association's 14th
summit, Afghanistan
became its eighth

Evolution
In the late 1970s, Bangladeshi
President Ziaur Rahman
proposed the creation of a trade
bloc consisting of South Asian
countries.
President Rahman addressed
letters to the Heads of
Government of the countries of
South Asia, presenting his vision
for the future of the region and
the compelling arguments for
regional cooperation in the
context of evolving international
realities.
The foreign secretaries of the
seven countries met for the first
time in Colombo in April 1981

A series of meetings followed in


Nepal (Katmandu/November
1981), Pakistan
(Islamabad/August, 1982),
Bangladesh India (Delhi/July
1983) to enhance regional
cooperation
The next step of this process was
the Foreign Ministers meeting in
New Delhi in 1983 where they
adopted the Declaration on South
Asian Regional Cooperation
(SARC).
First SAARC Summit held on 7-8
December in 1985 in Dhaka
where the Heads of State or
Government of seven countries

Aims and Objectives


Welfare of the people of south Asia.
Economic growth, social progress and cultural development .
Strengthen selective self-reliance among the countries of south Asia.
Understanding and appreciation of one another's problems.
Strengthen cooperation among themselves as well as with other
developing countries and international and regional organizations
Maintain peace in the region.

Member of SAARC

Observers
Australia
China
European Union
Japan
Iran
Mauritius
Myanmar
South Korea
United States

POTENTIAL FUTURE
MEMBERS
Myanmarhas expressed interest in
upgrading it's status from an observer
to a full member of SAARC.
Russia has expressed interest in
becoming an observer of SAARC.

South Africa has participated in meetings.

SAARC
Areas of Cooperation

Agriculture & Biotechnology


Trade & Finance
Education
Information , Communication & Media
Science & Technology
Energy & Environment
Tourism & Social Development
Culture
People-to-People Contacts

Trade & Finance


The acceleration of economic growth is a Charter objective of SAARC.
Corporation in core areas of trade and finance b/w the SAARC
members in 1991.

The following important processes of SAARC are promoting


cooperation in the field of Trade, Economy and Finance
Customs Cooperation
South Asian Free Trade Area (SAFTA) (Custom Duties down to 20%)
SAARC Preferential Trading Arrangement (SAPTA)

SAPTA
(SAARC Preferential Trading Agreement)
The Agreement on (SAPTA) was signed on 11 April
1993 and entered into force on 7 December 1995
To promote and sustain mutual trade and
economic cooperation within the SAARC region
through the exchange of concessions.
The establishment of an Inter-Governmental
Group (IGG) to formulate an agreement to
establish a SAPTA by 1997 was approved in the
Sixth Summit of SAARC held in Colombo in
December 1991.

The SAPTA experience


Signed in Dec 1993, came into force in 1995
Objective was to create and sustain mutual trade &
economic cooperation through exchange of concession
Distinction between LDC & developing countries
3 rounds of PTA
In the first round 226 tariff lines included & No
discussion on NTB
Despite tariff reductions under Sapta, intra-regional
trade in South Asia did not register any noticeable
growth in percentage terms

SAFTA
(South Asian Free Trade
Agreement)

The South Asian Free Trade Area or SAFTA is an


agreement reached on 6 January 2004 at the 12th SAARC
summit in Islamabad, Pakistan
It created a free trade area between all the then member
countries
The SAFTA agreement came into force on 1 January 2006
The purpose of SAFTA is to encourage and elevate
common contract among the countries such as medium
and long term contracts.
It involves agreement on tariff concession like national
duties concession and non-tariff concession.

SAFTA-INSTRUMENTS
Trade Liberalization Programme
Non Tariff Barriers
Sensitive List
Rules of Origin
Special and Differential treatment Provision for LDC

Trade Liberalization Programme


Phase 1- 2006-2008
a) LDCs
b) NLDCs

Phase 2a) NLDCs 2008-2013


b) LDCs 2008-2016

Trade Liberalization Programme

Non Tariff Barriers


Further divided into two:
1) Technical NTBs
2) Non Technical NTBs

SAFTA has divided into


a) Infrastructure
b) Procedural
c) Standardization
d) Para tariff barriers

Sensitive List
Sensitive list is a list with every country which does not include
tariff concession.
Bangladesh has 1,233 products on the sensitive list for the Least
Developing countries and 1,241 for the non-Least developing
countries under the SAFTA.
India has 480 items on the sensitive list for the LDCs and 868 for the
non-LDCs.
Bhutan has 150 items for both the LDCs and non-LDCs and has no
plan of shortening its list.

Sensitive List
Nepal has 1,257 for the LDCs and 1,295 for the nonLDCs.
The Maldives has 681 for all seven SAFTA nations.
Pakistan had 1,169 in its sensitive list but has cut its
sensitive list by 20%.
Sri Lanka has 1,042 and Afghanistan has 1,072 items on
the negative list

SAARC TRADE :-

Growth and Structural


Change
The average annual growth rates of GDP and per capita
GDP are indicators of economic growth of a country. The
table below gives the data on these two indicators for
all the SAARC nations.

The table shows that there has been an increase in


the rate of growth of both GDP and per capita GDP
for Sri Lanka and Afghanistan
Growth rate of GDP in Sri Lanka has increased
marginally along with growth rate of per capita GDP
In the case of Bangladesh, Bhutan, Nepal and India
both the rates of growth have declined marginally,
thereby pointing towards a slowdown in these
economies
In the case of Maldives and Pakistan both the rates of
growth have declined significantly, thereby showing
that there is recession in these economies.

Contribution to GDP by
Sectors

Share of agriculture sector has declined


and that of the services sector has grown
over the last thirteen years
Here Pakistan is exception where the
share of secondary sector has grown over
the years except India and Maldives and
that of the other two sectors has declined
Major structural change in the economies
of SAARC.

Average Annual Growth of Different


Sectors

The annual average growth rate (AGR) of the


agriculture sector has increased in Bangladesh,
Bhutan, Nepal and Sri Lanka over the period 1990
to 2000-2012
This rate has declined in Pakistan. The AGR of the
industrial sector has doubled in Bhutan, whereas
it has declined considerably in Nepal and Sri
Lanka
The growth rate of industry has increased in
Bangladesh, India and Pakistan during the decade
2000-2012 as compared to the previous period.

Successes
and
Failures

ECONOMIC ACHIEVEMENTS
SAPTA(SAARC preferential trading arrangement)was signed
on 7 December, 1995
SAFTA(South Asian Free Trade Area) was signed in
Islamabad in January 2004
SAARC chamber of commerce and industry (SCCI)
SAARC constitutes South Asian Development Fund(SADF)
Signed an agreement of mutual assistance.

Avoidance of double taxation were signed.

INTEGRATED PROGRAMME
OF ACTION (IPA)

Agriculture
Rural development
Science and technology
Health
Transport
Sports
Arts
Culture and
Population activities

LITERACY AND EDUCATION


Till 2013 going to establish a common university
for education in Delhi

POVERTY ALLEVIATION
Regional food security essence

Promoted global objective of shelter for


all.

TERRORISM AND DRUG


TRAFFICKING
Convention on terrorism was signed in
November,1987
SAARC convention on narcotic drugs signed on
November, 1990

SAARC terrorist offences monitoring


desk(STOMD)

SAARC drug offences monitoring desk(SDOMD)

FALIURES OF SAARC
India tries to dominate the function and
activities of SAARC
Large variety of different political system
Large variety regional and cultural differences
They lack financial resources and advance
technologies
Involvement of external actors

Internal problems constituting social


economic and developmental and growth
issues.
Bilateral disputes and differences
Food Security Reserve failed to meet the
need of Bangladesh
Suffers from an acute resource crunch

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